McDonald's suffers blow to forecasts, prestige in analyst surveys

A car leaves a McDonald's in San Francisco in July. (Justin Sullivan/Getty Images)

Two surveys released Tuesday by food industry analysts highlight trouble at McDonald's on the inside and out.

In one, based on responses from 2,000 consumers, investment firm Goldman Sachs said McDonald's appears to be less able to convert advertising into customer visits. The world's largest hamburger chain is spending more on advertising, especially promoting a wealth of new products such as Mighty Wings, while sales at its stores slow.

"It has not had strong innovation for the past few years, and it is the restaurant consumers are least likely to recommend to their friends/family," the firm added.

McDonald’s also ranked last in perceived quality, healthiness and consumers' willingness to pay more for certain menu items among major fast food chains, according to the Goldman survey.

A separate analysis from Janney Capital Markets suggested that estimates for McDonald’s monthly sales are too optimistic near term.

Citing Janney's survey of McDonald’s franchisees, analyst Mark Kalinowski expects sales in September, which the chain has not reported, to show anywhere from a 1 percent decline to a 0.1 percent increase. That's much lower than the average prediction of 1 percent growth among Wall Street analysts. Kalinowski predicts October sales will drop 0.4 percent, well below Wall Street's average expectation of 3.3 percent growth.

The analyst lowered his earnings expectations for McDonald's in 2014 to reflect the sales forecast.

Many franchise operators quoted in the survey -- all anonymously -- said the deluge of new products have not boosted sales as expected. Some suggested that McDonald’s needed to stick with the classics.